Spain's regional crisis hammers firms and families

October 18, 2012|Reuters

La Linea typifies the plight of citizens whose livelihooddepends on public budgets. The local government, the town'sbiggest employer, has simply stopped paying its 800 workerstheir regular wages. Staff did get last year's Christmas bonus,but only two weeks ago.

Government employees have little chance of finding any otherwork in the town if they leave their posts. Martinez said onecolleague who decided to quit is now out of a job.

La Linea has no industry and little tourism, despite lyingnext to the visitor magnet of Gibraltar. Unemployment is closeto 40 percent, far above the national rate of 25 percent whichalong with Greece is already the highest in the European Union.

Residents say Mayor Gemma Araujo, a Socialist, shouldnegotiate a better deal for the town in paying off its debts andprioritise paying staff.

Araujo admitted that municipal workers were owed a total ofeight months' back wages. However, she denied they had goneeight consecutive months without getting anything, saying somepayments had been made in June.

She blamed the mess on the town's previous administration,which was run by Rajoy's conservative People's Party. "When wetook over a year and a half ago, we discovered the situation wastotally chaotic at the town hall. There was 132 million euros ofdebt to providers," she told Reuters.

Now 70 percent of municipal income is being used to pay offthe debts, leaving little to run services or pay staff.

Araujo and her senior staff are still drawing their own,albeit sharply reduced, salaries. "The salaries of the mayor andother top officials have been cut by 70 percent." she said. "Nowwe need to stabilise the pay situation."

Already her workforce is demoralised. Mercedes Corbacho, whorestores religious art and directs a museum in the town, saidthere was little stomach for a fight over the unpaid wages."There are no strikes, there's no pressure. The last protest Iwent to there were five people there," she said.

Corbacho said she has started to fall behind on mortgagepayments for the family home, though at least her school teacherhusband is still being paid.

"I have to pay for my resources myself now ... We don't haveinternet (at the museum), I don't even have a computer," shesaid. Her husband has suggested they move elsewhere with theirtwo children aged 3 and 5, but they are reluctant to leave.

"Things are bad all over Spain, but we can't work withoutbeing paid," she said.